WASHINGTON — U.S. energy consumption has slowed recently and is not anticipated to return to growth levels seen in the second half of the 20^th century, according to a report by the U.S. Energy Information Administration (EIA). The case projections referenced by the EIA in the Annual Energy Outlook 2015 (AEO2015) show domestic consumption is expected to grow at 0.3 percent annually through 2040, less than half the rate of population growth. Energy used in homes is essentially flat, and transportation consumption will decline slightly, meaning that energy consumption growth will be concentrated in U.S. businesses and industries.

Near-zero growth in energy consumption is a recent phenomenon, and there is substantial uncertainty about the main drivers of consumption as the U.S. continues to recover from the latest economic recession and resumes more normal economic growth. EIA’s analysis in the AEO2015 includes several cases with various assumptions about macroeconomic growth, world oil prices, and domestic energy resource availability.

Increases in energy consumption are mostly related to economic activity, and U.S. industrial and commercial enterprises are projected to increase output more rapidly than countervailing influences from improved technologies. Existing policies also can moderate energy use. Energy intensity, measured as the amount of energy per unit of output, does continue to decline during the projection period. Nonetheless, industrial energy consumption still rises by 0.7 percent annually through 2040, while commercial consumption rises 0.5 percent per year in the AEO2015 reference case.

Declines in energy consumption tend to result from the adoption of energy-efficient technologies (often affected by policy measures) and larger, structural changes in the economy. Although the residential and transportation sectors are different in the ways they consume energy, energy consumption in these sectors through 2040 is projected to remain below historical levels.

Most of the major energy-consuming equipment and appliances in U.S. homes and apartments have been covered by federal energy-efficiency standards since the mid-1990s. As this equipment can often last for decades, the U.S. is only now reaching a period in which most appliances were manufactured and installed in an era when these efficiency standards were in place. Residential consumption has also declined as the population has shifted toward warmer climates, reducing the need for space heating. The corresponding increase in energy for space cooling is much less than energy for heating, thus reducing overall residential energy consumption.

For more information, visit www.eia.gov/forecasts/aeo/index.cfm.

Publication date: 5/25/2015

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